If an Employer Makes a Contribution to a Qualified Retirement

question 48

True/False

If an employer makes a contribution to a qualified retirement plan on behalf of an employee, the amount is currently deductible by the employer, and the employee must include the amount in gross income at the time the contribution is made.

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Definitions:

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, where the borrower commits to paying back the principal along with interest.

Retirement

The act of leaving one's job and ceasing to work, typically due to age, with various financial planning strategies employed to ensure financial security.

Future Interest

A legal right to property ownership, possession, or enjoyment that begins at a future date.

Effective Interest Method

A technique used in accounting to allocate the discount or premium on bonds payable over their life to interest expense, reflecting a constant rate of interest.